Media Buyers Get the Squeeze7 May, 2010 By: Nicole Urso Reed Response
Short-form prices shoot back up as inventory shrinks and general ad sales recover.
A sharp incline in short-form DRTV pricing may signify a rebounding economy and the end of a two-year run on discounted rates.
In the October 2009 installment of Response’s semi-annual Media Buying and Planning Guide, media buyers reported discounts of up to 30 percent on short-form local broadcast and national cable buys. Inventory held steady but it didn’t always sell at the set rate during the upfront season, so buyers who held out often secured significant last-minute bargains.
It was a buyer’s market, but according to Brian Fays, executive vice president of advertising sales at MTV Networks (MTVN) and member of Response’s Editorial Advisory Board, media buyers, especially on the short-form side, aren’t going to find those rates much longer and should begin to think more strategically instead of relying on fire sales.
“The tail end of third quarter and fourth quarter was the strongest marketplace we’ve seen for demand and increased pricing in probably about two years,” says Fays.
The resurgence drove short-form pricing up 25 to 40 percent depending on the network. “The national side tightened up, and there’s some scarcity on the DR side so inventory shrank,” he adds. “The demand went up, the prices went up, and it was a win-win. I think it was the first time in two years really that the agencies — the clients — had to deal with significant pricing increases.”
Fays believes that prices will continue to climb throughout the rest of 2010 as the economy and general ad sales recover. He says, “I know it’s going to continue because in the first quarter, Viacom had the best first quarter we’ve ever had, revenue-wise.”
Jason Baron, vice president of Turner Direct Response, which includes major networks CNN, TBS, TNT and the Cartoon Network, has witnessed a slowdown in long form, but short-form rates have risen.
“Turner Direct Response sales teams did witness a boost [of DRTV media buying] in 2008 and 2009,” says Baron. “Our business is not slowing, and we expect to maintain competitive rates throughout the year.”
MTVN’s third-, fourth- and first-quarter upswing is also due in part to bolstered ratings from breakout shows including “Jersey Shore” and “16 and Pregnant,” two hit reality series on MTV.
“Our ratings have been strong,” says Fays. “That’s why our DR clients have been willing to pay out more efficiently than they have in the past.”
According to Michael Lyons, vice president of advertising sales at A&E Television Networks, direct response sales have recovered more quickly that some would have expected.